Kalshi Traders Raise Fed Hike Odds to 64% by July 2027 as 30-Year Yield Hits 2007 High
Updated
Updated · CNBC · May 19
Kalshi Traders Raise Fed Hike Odds to 64% by July 2027 as 30-Year Yield Hits 2007 High
6 articles · Updated · CNBC · May 19
Kalshi traders now put a 64% chance on the Fed’s next rate hike arriving by July 2027, up from roughly 50-50 odds for the first half of 2027; they also see a 43% chance of tightening this year.
Those odds jumped over the past 24 hours as Treasury yields surged, inflation fears persisted and oil stayed elevated during the unresolved U.S.-Iran war.
The bond-market move has sharpened the shift away from rate-cut expectations even as Kevin Warsh—Trump’s pick to replace Jerome Powell—is due to be sworn in as Fed chair on Friday.
The 30-year Treasury yield climbed Tuesday to its highest level since 2007, reinforcing views that markets may constrain monetary policy more than the incoming chair.
That marks a sharp contrast with Trump’s push for lower rates: stronger labor data, firmer inflation and recent Fed messaging have already weakened the case for cuts.
Are bond markets now forcing the Fed’s hand on interest rates, regardless of who is the Chair?
As the U.S.-Iran war fuels inflation, will the Fed's rate hikes spark a global economic slowdown?
Can the new Fed Chair tame persistent inflation without derailing a strong U.S. economy and labor market?
64% Chance of Fed Rate Hike by July 2027: Market Sentiment, Inflation, and Policy Implications
Overview
As of May 2026, market sentiment has shifted rapidly, with traders on prediction platforms like Kalshi and Polymarket increasingly betting on Federal Reserve interest rate hikes. The probability of a rate hike by July 2027 has surged to 64%, and there is a 43% chance of tighter policy as soon as this year. This marks a clear move away from expectations of rate cuts, as the 'no-cut trade' gains traction. With Kevin Warsh, President Donald Trump's appointee, potentially overseeing these decisions, the market now anticipates the Fed will maintain or raise rates to address persistent inflation and fiscal concerns.